Transactions Among the Great Challenges of Financial Inclusion

Financial inclusion has a favorable correlation with individuals, their households, companies, and the country, and not just in terms of the growth and economic development of communities. It also has been shown to have a positive impact on social factors, such as access to decent work, equal opportunities for women, social cohesion, and the empowerment of vulnerable groups. Even in those countries with high levels of banking penetration, financial inclusion provides a more robust, solid and stable financial system in terms of the supply of services. We will discuss the role of regulators regarding this last point, which is fundamental and we cannot ignore its relevance. 

At Gentera, we aspire to have a more humane financial system. Financial inclusion counteracts inequality and poverty, and includes popular or underserved segments, providing opportunities for more people to achieve different goals in their personal or professional lives.

One of the keys to financial inclusion is the sustainable support it offers. Through formal financial services, people have access to formal offers that give them the reliability to continue using other types of products that meet their needs. 

According to the results of the latest National Financial Inclusion Survey 2021, there are more than 42 million people over the age of 18 who do not have access to basic financial services, such as savings or credit products. In addition, the study shows that the lack of access to these services is higher in rural populations and among low-income people. While the number is lower than that in 2018, the growth of only 2 percentage points (pp) speaks to the remaining challenge.

While work that has been done over the decades to financially include more people, there are still millions of people who do not have access to financial services for various reasons. In the 2021 survey, 41% of respondents said that one of the most common reasons is their place of residence being far from urbanized areas and without access to an infrastructure that can connect them to financial institutions.

In Mexico, the product that has allowed people to be financially included is credit. At Gentera, we have been the gateway to credit for more than 14 million people over our 32 years of history. We are talking about people who do not have access to traditional banking, but who definitely have dreams to fulfill.

Bringing financial services to people and staying close to them, helps them understand and visualize that it is not just credit that they need to be financially included. Savings, insurance and transaction channels are also important to form a financial ecosystem that is convenient for them. But the physical banking infrastructure is too onerous, not to mention the great infrastructure challenges that persist in much of our territory.

Without a doubt, one of the challenges is to bring financial services to the most remote communities in the country and, in addition, to keep in mind that not everything is reduced to the dispersion of credit or the opening of bank accounts. 

How can we help people to carry out financial operations in their own communities?What is the point of having a card, credit or any other financial service if people have nowhere to make financial transactions? Therefore, financial inclusion is not only about supply, but also about the use and enjoyment of services. That is why being close to people drives us to develop better services, as is the case of our company Yastás, the largest administrator of banking correspondents in the country. For nearly 12 years, Yastás has helped people access financial transactions, service payments and airtime recharging in places where banking infrastructure is limited or non-existent. 

Yastás’ aspiration is to connect millions of people to the modern economy with payment points, where they can cash-in and cash-out their money no more than 500 meters from their homes. Thus, our correspondent banking points are located within the communities of the people we serve, such as grocery stores, stationery stores, hardware stores, candy stores, even veterinarian offices  and auto repair shops.

One of the main characteristics that has made  Yastás successful is that it allows the people of these entities to save time and money by not having to travel several kilometers from their communities. Thus, people carry out their operations in the stores. For those who are commission agents, Yastás represents an opportunity because when people go to their business to complete  a transaction, they also make purchases in these establishments. In addition, providing financial services by the people from the community to people of the community brings human value to society.

In Mexico, there are still areas that do not have internet connectivity. In rural areas, 43.5% of the population is still not an internet user. This figure highlights the urgent need to develop connectivity plans for these areas. It also shows that we need to continue creating products that make it easier for people to use financial services.

Credit may be the gateway to financial services, but it should also represent the entry point to the use of a broad ecosystem of financial products. Therefore, having convenient transaction points, such as ATMs and payment points in stores and supermarkets, is essential to ensure that these communities have access to basic financial services and have greater control over their finances.

Financial inclusion is essential to achieve a more equitable and just society. Having convenient transaction points for everyone is another important step toward achieving effective financial inclusion.